HSMP Query: Past Earnings

[dhilipki]

Hi Everybody,

I have a few questions regarding HSMP, especially earnings. I am presently preparing myself to apply for HSMP in, "Under 28 Years" category since I am 26 years old. I am likely to apply for HSMP in October 2004, and since the income will be calculated for the past 12 months from the date of application I have a question on past earnings.

For the year April 2003- March 2004, my total income has been INR 5,50,000 which is approximately GBP 7145 assuming an average conversion rate of 77 INR per GBP. This income is the gross income which includes various allowances like fuel, conveyance, travel, medical & provident fund. I can obtain letters from my employer to substantiate this claim. But meanwhile, the tax return for the same period reflects only INR 3,55,900, approximately GBP 4622, since the rest was allowances & provident fund. But for the year April 2004- March 2005 my earnings are substantially higher due to a hike and even my tax application form shows a much higher income of around INR 5,13,000 (around GBP 6660). But I am yet to file my returns for the present year (I can file returns only during May 2005) but have payslips and letter from employer for all the months.

My questions are:

a. Can I still apply for HSMP though I have tax returns only for part of the past 12 months and during the same period, the return filed is lesser than 5000 GBP (but with allowances/tax exemptions, it's > 5000 GBP), but while for the rest of the period, I have a higher income reflected even in my tax return forms but I am yet to file my returns?
b. Will income exempt from tax returns but still part of my income, like allowances, etc be considered as past earning?

Please remember that:

a. I can get supporting letters from my employer in addition to the tax return substantiating all my claims
b. I can also supply pay-slips for the past 12 months period in addition to the tax return and supporting letter

Any replies will be very helpful. I know that there has been many posts regarding earnings and I have been trying to locate Ajay's posts on past earnings, but so far haven't got lucky. If anyone could answer this or can give the links in this board, it will very helpful.

[dhilipki]

50 views so far and no replies. Looks like there are more people with the same question and lesser people with answers!!

Could any of you experienced guys please reply and help us out!!!

[Mini]

Dhilip,
In absence of any responses i shall try give you my experience.
I had a similar problem wherein the last 12 months period for hsmp, salary letter periods and the tax return periods were all different. My appl was rejected due to no award of earning points.

I have appealed against the decision and sent a reconciliation sheet taking actual values from each doc for the past 12 months preceeding the appl. For e.g pro-rata from tax return, salary letters & bank statements and converting to GBP rate (1) Avg for the 12 month period (u can get this from www.oanda.com) (2) as on application date (or as close as u can get)

For non-taxabale allowance i had taken a letter from my orgn stating the same.

I have not received a response to my appeal yet so no guarantees for this solution.

[hk_007]

b. I can also supply pay-slips for the past 12 months period in addition to the tax return and supporting letter

If your salary slip shows the income that you can use to qualify, just send in that as evidence together with letter from employer detailing salary. These two documents should be sufficient if they complement one another.

[Random]

Mini

it will be of real help to share your experience on the earnings calculations as I have a similar problem:

My tax returns are for period April 03 - Mar 04
Certificate from CA is for the period April 03- Mar 04
Salary letter from the company are (a) Apri 03 - Mar 04 & (b) April 04 - Aug 04

My salary slips do not reconcile with the tax returns because I get salary in two fold (both taxable). Majority of the part is in Salary slip and other part (30%) is paid seperately.

Any suggestions

[dhilipki]

Hi Mini,

Thanks for your reply. Sorry couldn't respond earlier since I was away from work for sometime! I am going to apply with all the evidence I have, pay-slips, last year's IT return, and the coming year's tax projection. Plus, I am also including (increment) letters from my employers as additional evidence. Lets hope they give me points!

Regards,
Dhilip

[Mini]

My salary slips do not reconcile with the tax returns because I get salary in two fold (both taxable). Majority of the part is in Salary slip and other part (30%) is paid seperately.

Random,
You should get a letter on a letterhead from the company stating that your salary is in 2 parts. Use the salary letter to explain the 2 parts( i am assuming the 2 parts are in the salary letter).

[Random]

Mini,
thanks a lot for your reply. Yes my salary letter states that I receive my salary in two parts (for the non salary slip component is mentioned seperately in my salary letter with a clear statement that it is paid seperate than the salary slip).
For the income proof, I am sending the following:
Orginal IT returns for April 03- Mar 04
Original Salary Letter for April 03- Mar 04
Original Salry Letter for April 04- August 04
Original Chartered Accountant Certificate for April 03- Mar 04

Do you think this is sufficient or should I send my salary slips as well. My problem with salary slips is that I do not want them to be confused due to discerpancy between Salary Slip and Salary letter if they do not properly read the clarificatory note in the Salary letter.

Will appreciate your views.

Thanks

[Mini]

If the data between salary letter & Tax return tallies then no need for salary slips.